House prices are rising at their fastest rate for nearly two years as lower mortgage rates boosts buyer demand, latest figures show today.
Leading lender Nationwide said the average price of a home in the UK was up 3.2% in the year to September, up from 2.4 in August, having jumped by 0.7% during the month. That was the fastest annual rate since November 2022.
The average cost of the home now stands at £266,094, just 2% below all-time highs recorded in summer 2022 immediately before Liz Truss’s disastrous mini-Budget.
The pick up in house price growth follows the first interest rate cut from the Bank of England in four years in August when the main lending rate came down from 5.25% to 5%
Robert Gardner, Nationwide’s Chief Economist, said: “Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”
London lagged behind the national rate, as it has done fairly consistently since the pandemic, with 2% annual growth.
Terraced houses saw the biggest rises nationally, with prices up 3.5% followed by semi-detached homes and flats with increases of 2.8% and 2.7% respectively, whilst detached houses saw more modest growth of 1.7%.
But Gardner added: “If we look over the longer term however, detached homes have continued to have a slight edge over other property types, most likely due to the ‘race for space’ seen during the pandemic. Indeed, since Q1 2020, the price of an average detached property increased by nearly 26%, while flats have only risen by around 15% over the same period.”
Foxtons CEO, Guy Gittins, said :“Further positive house price growth in September suggests that market momentum has continued to build and there’s no doubt that buyer activity has strengthened following the cut to interest rates seen in August.
“We anticipate that the market will now go from strength to strength as we head into the Autumn season and what is traditionally a very active period for the UK property market and we’re already seeing more enquiries made, more offers submitted and more sales agreed, all of which bodes very well for the remainder of the year and beyond.”
